Lifetime ISA and IPA

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lozbrien
lozbrien Posts: 10 Forumite
First Anniversary
in Bankruptcy & living with it
Hi all,


I have been discharged as of the start of this month and had a letter of confirmation to this effect.


I am trying to rebuild my life like everybody else that has been in this awful scenario, and as a fairly young person I still aspire that I will one day be able to own my own house.


My parents have generously offered to give me a bit of a head start if I am allowed, and if I can set up a lifetime ISA pay some money into it.


Obviously I don't want to do that if it means I am breaking the rules or risk having that money taken away.


So my question is, can I do this, and if I do, do I need to declare it?

Comments

  • National_Debtline
    National_Debtline Posts: 7,998 Organisation Representative
    First Post First Anniversary Combo Breaker
    edited 5 April 2018 at 11:10AM
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    Hi lozbrien,

    ***EDITED***

    You will need to check the terms and conditions of any specific ISA carefully, to see if a third party can pay money in on your behalf and still receive any bonus. But having an ISA in itself, where a third party is paying the money, post discharge, shouldn't be a problem, from a bankruptcy perspective, even with an IPA - see post below.

    Laura
    @natdebtline
    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
  • lozbrien
    lozbrien Posts: 10 Forumite
    First Anniversary
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    Hi Laura,


    Thank you for your reply.


    I do currently have an IPA, so I will be sure to check this out with the official receive for clarity.
  • Jono987
    Jono987 Posts: 185 Forumite
    First Anniversary First Post
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    From my understanding, after discharge, cash gifts are yours to keep. This is irrespective of having an IPA or not. AKA, if you got an inheritance, after discharge but still within your IPA, you could keep it all.
  • National_Debtline
    National_Debtline Posts: 7,998 Organisation Representative
    First Post First Anniversary Combo Breaker
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    Hello again,


    Having checked the technical manual more closely, I would like to amend what I said before and thank Jono987 for prompting me to do so.


    As you have been discharged, the lump sum from your parents should not be taken through an increase in your IPA as it shouldn't be considered income. There are some exceptions to this, where by if you receive a bonus from your employer or potentially a lump sum from a pension, where an IPA can be amended to include the lump sum; but the money from your parents shouldn't fall into this category. I would like to apologise for any confusion I have caused.


    I would mention that you may still find it difficult to add to the ISA through savings whilst an IPA is in place, but other than that, it shouldn't be a problem.


    Laura
    @natdebtline
    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
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